Inflation at 4-month high in Feb, Industrial growth slows down to 1.7%
New Delhi, Mar 12: Retail inflation inched up to a four-month high of 2.57 per cent in February, though it is still below the RBI's benchmark, raising hopes of another round of rate cut in April to boost industrial growth which slipped to 1.7 per cent on account of manufacturing sector slowdown.
According to the data released by the Central Statistics Office (CSO), the Index of Industrial Production (IIP) expanded by just 1.7 per cent in January, significantly down from 7.5 per cent growth in the year-ago month.
The CSO, however, revised marginally upwards the IIP growth number for December 2018 to 2.6 per cent from the earlier estimate of 2.4 per cent.
Slowdown in industrial production notwithstanding, a marginal increase in inflation raised the clamour for another round of rate cut by the Reserve Bank on April 4 to boost economic activity. The central bank had reduced the key lending rate (repo) by 25 basis points in February.
Following the RBI rate cut, many banks announced up to 10 basis point reduction in their lending rates.
Another set of data released by CSO showed that retail inflation based on Consumer Price Index (CPI) inched up mainly due to firming up of food prices.
Though Headline (inflation) is showing an increase, the core CPI component moderated again to 5.3 per cent in February 2019 from January 2019 level of 5.36 per cent, the country's largest bank SBI said in a research report.
The retail inflation number for February 2019 is the highest since October 2018 when it stood at 3.38 per cent, the data released by the Central Statistics Office under the Ministry of Statistics and Programme Implementation (MoSPI) showed.
On monthly basis, consumer food price index moved up by 0.15 per cent in February against January 2019.
Food inflation was lower at (-) 0.66 per cent in February against 3.26 per cent in the same month last year. The retail inflation in February 2018 was at 4.44 per cent.
In fuel and light category, the rate of price rise slowed to 1.24 per cent from 2.20 per cent in January.
On IIP, SBI said the numbers are disappointing.
The growth rate of manufacturing sector dropped sharply to 1.3 per cent in January from 8.7 per cent in January 2018. There was also slump in the power generation segment as the expansion was almost flat at 0.8 per cent compared to 7.6 per cent in the year-ago month.
However, the silver lining was the mining sector which grew by 3.9 per cent in January this year compared to 0.3 per cent in the year-ago period.
Giving more details about the factory output in the country, the CSO said capital goods segments, considered to be barometer of investment, and the intermediate goods segment witnessed a contraction.
Data also revealed that both growth in production of consumer durable and non-durable goods grew at a slower rate in January compared to the year-ago period.
The IIP growth during April-January period of the current fiscal stood at 4.4 per cent compared to 4.1 per cent in the same time frame a year ago.
Commenting on the data, B Prasanna, Head, Global Markets Group, ICICI Bank said industrial growth dipped below expectations in January 2019, with manufacturing and electricity sectors decelerating considerably.
On monetary policy, Prasanna said: "We expect another rate cut in the April meeting and subsequent action would be data dependent."
Ranen Banerjee of PwC India opined that lower IIP numbers and inflation of slightly over 2.5 per cent give headroom for further monetary policy action by the central bank.
RBL Bank Economist Rajni Thakur also suggested that the latest CSO data calls for a rate cut.
"...there clearly is a case and space for one more rate cut of 25 bps by RBI in April to support growth," she said.
The six-member Monetary Policy Committee (MPC) of the RBI will meet for three days and announce the first bi-monthly monetary policy of the next fiscal on April 4.
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Two injuries, one DNF, a DQ as India end messy World Relays campaign
Gaborone (Botswana) (PTI): Amoj Jacob and Ragul Kumar got injured during the men's 4x400m and 4x100 races respectively as India ended their World Athletics Relays campaign in disappointment on the second day of competitions here on Sunday.
The Indian camp had high hopes of making the 2027 World Championships in the men's 4x400m relay but the team did not finish (DNF) the race as Jacob suffered cramps and pulled out of the race after taking the baton from the first leg runner Dharamveer Choudhary. Rajesh Ramesh and Vishal TK were to run in the third and fourth legs.
Those teams which could not qualify for the 2027 Beijing World Championships by reaching the final round of each of the six relay events on Saturday were given another chance in the second qualification round on Sunday.
The top two teams in each of the two heats (in all six relay events) booked the Beijing ticket on Sunday.
India will now have to try and qualify for the World Championships through the Top Lists of the World Athletics, which is a long and tedious process.
In the men's 4x100m race, third leg runner Ragul Kumar fell down the track after failing to hand over the baton inside the exchange zone to fourth leg runner Gurindervir Singh, which clearly showed the lack of coordination among the runners.
Harsh Santosh Raut and Animesh Kujur ran the first two legs.
The Indian quartet was disqualified and Kumar was seen being taken away from the Field of Play with the help of the volunteers.
It was a comedy of errors in the case of the women's 4x100m race, which saw the baton being dropped during an exchange between first leg runner Tamanna and second runner Nithya Gandhe, though the Indians finished the race in 53.09 seconds.
Gandhe started running quite a distance, but after realising that the baton was not in her hand, she turned and ran back to pick it up.
The only silver-lining for the Indian contingent was the national record time in the mixed 4x100m relay race, though the quartet of Ragul Kumar, Nithya Gandhe, Animesh Kujur and Sneha SS finished sixth in heat number two with a time of 41.35 seconds, bettering the previous national mark of 42.30 seconds set in March in Chandigarh.
The mixed 4x400m relay quartet of Theerthesh P Shetty, Kumari Saloni, Nihal William and Rashdeep Kaur ended at fifth in heat number one with a time of 3 minutes and 19.40 seconds.
On Saturday, all the five Indian relay teams had failed to make it to the respective final rounds and thus missed out on the 2027 World Championships berths.
